I’m looking at Alibaba going into Earnings

Danielle Shay Joins Seema Mody on Trading Nation to discuss how Chinese stocks are underperforming. Click the image above to see the full segment.

Lately, my primary trading focus has been on relative strength winners that’re benefiting from COVID-19.

One of my favorite trading setups is the rally prior to an earnings report on bullish anticipation of the actual report. Typically, I start this trade about 7-14 days prior and/or when it hits key support levels.

Last week, Amazon (AMZN) was a great example of this. Heading into earnings they rallied hard even though their actual report turned out soft. I was able to make a good trade because the anticipation was high, making the stock trade higher, but it was also due to the fact that I got out before the reports actually surfaced. This allowed me to ride the bullish run without getting burned by the less-than-perfect report.

I plan to do something similar with Alibaba (BABA).

Even though I wouldn’t necessarily want to own this long term, I love trading it short term. With its recent fall in price, it could potentially become an even better buy because you can get it on a discount going into earnings. Plus, I still think it has room to make a bullish run. E-Commerce has been particularly hot, and we’re still a few weeks away from earnings allowing it time to climb back up.

As for additional Chinese names — I like JD. I use the exact same setup on it, except I like it for a buy off of the 50 SMA, as it didn’t fall as far as Alibaba.

Click here to watch the full segment.


Want more trading education? Follow me here by signing up for my free newsletter, at www.fivestartrader.com, or in my Mastery program which you can find at www.simplertrading.com/profits. You can also follow me on Instagram, Twitter @traderdanielle, or on Facebook.

Leave a Comment

Up Next...

When a Ticker Makes Targets

Hey Traders! On Monday, I sent you a video about my short-term setup in Tesla, along with my $250 price target. You can check it out in the Tweet below… Since then, the squeezes I noted fired to the long side, and Tesla traded directly to my Fibonacci price target at the 1.272% extension level. … Read more

Read More

A Trade Setup in TSLA

Good morning, traders! The Nasdaq futures are choppy at 16,000 after making quite the run. So, what’s next? Looking for the next round of setups, of course! When tickers and indexes get sticky, squeezes will start to consolidate. Those squeezes generally occur on the lower time frames first. When those squeezes fire, they can either … Read more

Read More

The Microsoft Effect

Hey traders! Microsoft made a new, all-time high yesterday and may very well take the Nasdaq along for the ride. What is next to come in Microsoft, the Nasdaq, and more? Check out my video update below:

Read More

Subscribe Today!

Want my up-to-date analysis, setups, top trading tips, and more? Be a Five Star trader, and join my free newsletter today!

Sign Up Now